There’s a quiet storm brewing in the global housing market, and the thunder is getting louder.
In the United States, a rare imbalance is sending shockwaves through the property sector: home sellers now outnumber buyers by more than 500,000. It’s the largest such gap since 2013. At first glance, that might sound like good news for frustrated would-be buyers. But beneath the surface, it’s a red flag — and not just for Americans.
Australia, like many developed nations, is deeply tied to global capital flows, inflation cycles, and the psychology of markets. What happens in the U.S. doesn’t stay in the U.S., especially when it comes to real estate.
Cracks in the Foundation: What’s Happening in the U.S.?
- Sellers outnumber buyers by 500,000+, creating the first genuine “buyer’s market” in a decade
- Mortgage rates sit around 6.8 to 7%, keeping affordability painfully low
- Homes linger on the market for 38 days on average, up significantly year-on-year
- Homebuilders report the lowest sentiment in over two years, slashing prices and pausing projects
- Price cuts are rising, with nearly 1 in 5 U.S. listings seeing downward adjustments
The problem is clear. Homeowners who locked in ultra-low interest rates in 2020 and 2021 don’t want to trade up and pay double the borrowing cost. New buyers can’t afford to enter at current rates and prices. The result is a market in stalemate.
And if interest rates don’t come down soon, the fear is that prices will keep sliding — slowly at first, then potentially faster. For a country where property equity underpins so much of household wealth, that’s a dangerous spiral.
What It Means for Australia
Australia is no stranger to housing volatility. But compared to the U.S., our market has weathered recent shocks better, thanks to:
- Constrained supply
- Record immigration
- Strong employment
- A cultural obsession with property ownership
However, a prolonged U.S. housing downturn could start a chain reaction:
- Global investor confidence may fall, cooling appetite for Aussie real estate as a “safe haven”
- The RBA may hold or cut rates faster, trying to protect local sentiment and construction jobs
- Australian property valuations could stagnate or dip, particularly in premium or recently overheated suburbs
- Pressure on builders may intensify, as global costs rise and demand softens
Let’s be clear. Australia isn’t the U.S. Our lending standards are stricter, and our population growth is strong. But housing isn’t just about domestic fundamentals anymore. It’s about global liquidity, psychology, and affordability.
Look Further, Think Bigger
This isn’t just a housing story. It’s a story about whether the global economy can engineer a “soft landing”, slowing inflation without tanking property markets.
If the U.S. Federal Reserve is forced to keep rates high well into 2025 to fight stubborn inflation, housing pain will deepen. That pain will ripple out, affecting Australian buyers, builders, and policymakers.
But if central banks act too fast and cut rates prematurely? Inflation may roar back, causing a different kind of instability.
This is a moment for caution, not panic. For policymakers, it’s a call to act wisely. For investors and families, it’s a time to reassess risk and plan ahead.